State To Expand Medicaid Waiver Affecting Long-term Care

State wants to build upon program that has delivered efficiencies in healthcare and given patients more choices

Four years into a demonstration project that affected the way tens of thousands of Medicaid patients received long-term care and other services, New Jersey plans to seek federal permission to build on the project’s reforms with other changes designed to make the healthcare system more flexible, improve patient outcomes, and reduce costs.

Officials with the state Department of Human Services said the project, which involves a Medicaid waiver for long-term care services extending through June 2017, has allowed them to significantly streamline administrative processes and invest in more efficient managed care. They said that, at the same time, it has given individuals greater flexibility in where they can live and what treatments they can receive. In addition, it has enabled the creation of three Accountable Care Organizations, coordinated efforts to reduce chronic illness in underserved communities, and provided flexible funding to help safety net hospitals.

In a draft application for an additional five years’ waiver, DHS has proposed to continue the managed care effort, which covered more than 23,000 seniors, developmentally disabled residents, and others in need of continuing care, as of last year.

It also aims to expand managed care coverage to those receiving treatment for mental health or substance abuse issues. Other changes are designed to improve the coordination of care for people covered under multiple subsidized insurance programs, smooth the healthcare transition for those leaving prison, and prioritize housing for individuals at risk of homelessness.

Some changes under the first waiver were slow to start. Nevertheless advocates for individuals with disabilities and those in long-term care have been largely supportive of the state’s efforts under the waiver, which began in late 2012. Some have made further recommendations.

The period for public comment on the application ends today at 5 pm. DHS will review this input and may make changes or incorporate other suggestions before it submits its proposal to the Centers for Medicare and Medicaid (CMS) later this year.

“The renewal application is really just the start to an extended conversation with our stakeholders about how to build upon the successes we’ve had in developing and implementing programs and services that meet NJ Family Care’s members’ needs in an efficient way,” said Elizabeth Connolly, acting Commissioner of DHS, which administers the Medicaid program – known as Family Care in New Jersey. “In the last four years, we’ve made Medicaid very patient-centered by adopting national best practices and uniquely tailoring our healthcare model.”

Overseen by the CMS, the waiver process reflects an ongoing national shift in the way healthcare is paid for and delivered. While Medicaid, a joint state-federal program that covers low-income residents and provides much of the funding for long-term care facilities, once paid providers for each treatment service, the program has started to shift to managed care, where bulk payments are designed to cover all a patient’s needs.

New Jersey already depends on managed care insurance companies to coordinate services for most of the state’s Medicaid patients; the 2012 waiver allowed the state to extend that umbrella to those in long-term care. “Thus far, the Demonstration has successfully expanded New Jersey’s existing health care delivery system reforms in ways that promotes access to quality health care while managing the rate of cost growth in Medicaid,” DHS wrote in the draft.

While initial reports suggest it will take longer to know the full impact, the waiver has allowed for greater flexibility in treatment options, a key element in transition from institutional to community-based care for those with long-term needs. Advocates have largely welcomed these changes, which allowed individuals to be covered for more diverse therapies, new treatments and housing, and other services closer to family and other community connections.

“We compliment the state’s efforts in transitioning patients into the community – frequently the most desired place of the patient, which also utilizes new technology to enhance services,” said Chrissy Buteas, president and CEO of the Home Care & Hospice Association of NJ. Buteas said it remains a challenge for these providers to hire and retain qualified staff members, given the low reimbursement rates.

While Gov. Chris Christie increased funding to cover Medicaid reimbursements for patients seeking mental health and substance abuse treatments, providers have said the fee schedule generally remains too low to cover their long-term costs. Most rates have remained largely static for years, which providers have said makes it economically challenging to treat Medicaid patients.

Suzanne Buchanan, executive director of Autism New Jersey, commended state officials for changes under the first waiver that expanded coverage for autism treatments for children and adults. The new application largely continues those trends, she said. She also urged the department to include coverage for certified specialists trained in applied behavioral analysis treatment, as part of a pilot program for those with both autism and behavioral health issues.

The Good Care Collaborative, a Camden-based program that coordinates care to bring down costs while improving treatment for some of the city’s most chronically ill, also praised the state’s efforts. The collaborative was particularly pleased with the decision to include the “housing first” program, which has shown that without safe, stable housing, other healthcare concerns can’t be effectively resolved. The group said additional funding upfront, and a commitment to scale up successful programs, would make the program even more successful.